Renters in Powys are being squeezed out of the market because properties are being turned into holiday lets, a think tank has claimed.

The study by the Bevan Foundation, reveals that the holiday let industry is having a dramatic effect on homes for rent as well as homes to buy in many communities – with Powys being one of the worst affected areas in Wales.

The Foundation says the number of properties listed on holiday lettings site Airbnb has risen from 13,800 in 2018 to 21,718 in May this year – with Gwynedd, Pembrokeshire and Powys having the largest number of properties listed.

It comes amid an acute shortage of affordable homes to rent. Last month the Bevan Foundation found that only 60 properties across Wales were advertised at rents at or below the amount that a low-income household can receive through Housing Benefit or the housing element of Universal Credit (known as Local Housing Allowance).

According to the study this is because Airbnb lettings are very lucrative compared to more traditional forms of rental income.

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Dr Steffan Evans, of the Bevan Foundation, said: “Property owners can often make significantly greater returns from a holiday rental than from residential lettings.

“On average, it would take a host letting out their property on Airbnb less than 10 weeks to obtain the same annual rental income as a landlord letting their property at LHA rates in all Welsh local authorities except Torfaen.”

Whilst the holiday lets are recognised as having an important role in the Welsh economy the study said it has not been balanced well enough to avoid a shortage of affordable homes to rent across Wales.

Dr Evans added: “With so few homes to rent for low income households, people are faced with an impossible choice: move out of their community, move into poor quality housing, try to plug the gap between their rent and their benefits by cutting back on food and heating, or become homeless.

“If we are to find a long-term solution to Wales’ housing crisis it is vital that work is undertaken to regulate the holiday let sector as well as the private rental sector.”